Critical Access Hospital
also known as: CAH · Critical Access
A small rural hospital designation that receives cost-based Medicare reimbursement instead of IPPS — required to be ≤25 beds and >35 miles from another hospital.
Critical Access Hospitals (CAHs) are a Medicare facility designation created by the 1997 Balanced Budget Act to preserve rural healthcare access. To qualify:
- ≤25 inpatient beds
- >35 miles from the nearest hospital (or >15 miles in mountainous terrain)
- Provide 24/7 emergency services
- Average inpatient length of stay ≤96 hours
In exchange for these constraints, Medicare reimburses CAHs at 101% of allowable costs rather than under IPPS. This protects small rural hospitals from the per-discharge math that would otherwise make them unprofitable.
There are roughly 1,300 CAHs in the U.S. — about 20% of all U.S. hospitals — concentrated in rural areas of states like Texas, Kansas, Nebraska, Iowa, and Minnesota.
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